The Swiss franc and the central bank: why such a strong currency?
Safe haven, strong franc, Swiss National Bank: what makes the Swiss franc one of the world's most solid currencies, and the role of the central bank.
The Swiss franc (CHF) is seen as a “safe haven”: in times of crisis, investors worldwide take shelter in it, which pushes it up. This solidity rests on the country's political stability, healthy public finances and historically low inflation.
The role of the central bank
The Swiss National Bank (SNB) runs the country's monetary policy. Its primary mandate is price stability. It is independent of the government, sets interest rates and can intervene on the currency market — because too strong a franc penalises Swiss exporters.
The flip side
A strong franc has a cost: it makes Swiss products dearer abroad and weighs on the export industry and tourism. Conversely, it protects purchasing power by making imports cheaper. This balance is at the heart of the SNB's decisions.
Frequently asked questions
Why is the Swiss franc so strong?
Because it is seen as a safe haven: political stability, sound finances and low inflation attract capital in uncertain times.
What does the SNB do?
It runs monetary policy to ensure price stability: it sets interest rates and can intervene on the currency market. It is independent of the government.
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